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Kaleidescape Ruling on DVD Copying Could Quash Innovation

The DVD CCA wields too much power, and will drive consumers to purchase unlicensed movie service and cheap DVD-ripping software overseas.


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The DVD Content Copy Association has won its lawsuit against Kaleidescape, maker of high-end movie servers.

A Santa Clara, Calif., court handed down a temporary judgment on Jan. 9 that Kaleidescape breached its contract with the DVD CCA, which licenses the Content Scramble System (CSS) decryption scheme for DVD players.

Kaleidescape lets users copy their DVDs onto a media server, and play back the movies disc-free. The court ruled that the CSS licensing agreement expressly prohibits this functionality – a disc must be present in the player. Period. It doesn’t matter if the consumer owns the disc. It doesn’t matter if the server is “locked down” with no way to share movies across a network.

I can’t argue with Judge William J. Monahan’s recent ruling in the breach-of-contract case, but I can argue these two things: 1) This is a very sad day for innovation in the digital entertainment realm and 2) there’s something fishy with the DVD CCA’s power.

I should clarify: It is a sad day for innovation when it comes to American-made consumer electronics manufacturers that try to abide by the intent of the law.

Kaleidescape makes expensive servers that transfer DVDs “bit-for-bit” with CSS encryption intact. The copied content cannot leave the Kaleidescape ecosystem.

It is true, as Judge Monahan noted, that Kaleidescape could have done more to protect content using a DVD carousel or destroy-after-copying scheme. But, really? Such burdens would surely force consumers to instead turn to illegal (by our standards) DVD-ripping products from offshore providers like Slysoft, which distributes AnyDVD ripping software.

MAIN STORY: Kaleidescape vs. DVD CCA: Judge Rules Against Movie Servers

It also encourages otherwise legitimate DVD server manufacturers to simply bypass the DVD CCA rather than be burdened by its licensing agreement. The CSS software is readily available, and many server manufacturers use it without licensing it from the DVD CCA. Other providers simply exclude DVD-copying software in their own products but encourage customers to download it from Slysoft and others.

Is this want Hollywood wants?

How many years has it been since movie makers have known about the potential of DVD-ripping abuse? At least a decade. And still, they have done nothing about it, when so much could be done to encourage the enjoyment of their products.

You’d think in 10 years, the DVD CCA and movie makers could come up with a way to thwart piracy and encourage compensation for their work.

I have argued in the past—as have many others—that the DVD CCA is an innovation-stifling cartel.

Judge Monahan debunked many of Kaleidescape’s claims about the secrecy of the DVD CCA but other potentially antitrust-violating claims should be addressed.

The organization wields too much power and favors its handful of board members, allowing would-be competitors to quash innovations from … innovators.

The DVD CCA must have some checks and balances in place to ensure that its cronies allow—indeed, encourage—new developments in digital media.

The End for Movie Servers?

It will be a tough road ahead for many of today’s movie-server vendors, some of which have licenses from the DVD CCA and some that don’t.

The licensees have plenty to fear from the DVD CCA. The recent ruling, though tentative, probably kills all hope that the Kaleidescape model will survive legal challenges.

But that doesn’t mean the end for media servers. First, the DVD CCA does not regulate digital rights management (DRM) for Blu-ray discs, just DVDs. Second, we’re sure to see more and more movie servers that bypass the DVD CCA altogether.

They may be subject to copyright-protection claims under the Digital Millennium Copyright Act (DMCA)—as RealNetworks knows all too well—but so far movie studios seem to have left the litigation to the DVD CCA, except in the case of Real, which had the potential to be a mass-market product. Will the Motion and Pictures Association (MPAA) and others keep their hands off the little guys such as Kaleidescape? Let’s cross our fingers.

RELATED:
Kaleidescape vs. DVD CCA: Judge Rules Against Movie Servers
Would Studios Rather We Buy DVD Ripping Products Offshore?\
DVD CCA Is an Innovation-Stifling Cartel
Is Your DVD Server Legal? Manufacturers Say Yes!



  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at [email protected]

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